Stakeholder Chevron

Justification for Chevron

Chevron is Angola’s largest foreign oil producer, and has the longest history in country of the international companies. They have made several of the biggest discoveries and hold concessions from Sonangol in 4 different “blocks”.

Stakeholder size (number of people)
a. 62,000 employees worldwide
b. Employs 2,500 Angolan nationals
c. 14-person board of directors, 8-person executive committee

Area of Influence
a. Geographic area
i. In Angola, four concessions that cover approximately 3 million acres
ii. One of the “supermajor” energy companies of the world, with a global reach

Description of Organization
a. Who are the leaders?
i. David O’Reilly – Chairman and CEO
ii. Peter Robinson – Vice Chairman
iii. Stephen Crowe – Vice President and CFO
b. How does one gain influence in the group?
i. Meritocracy
ii. Owning shares
c. What issues do they care about?
i. Increasing production
ii. Additional discoveries
iii. CSR/publicity
d. What does the organizational structure look like?
i. Public corporation

Financial Resources (if applicable)
a. List activities that generate cash flow
i. Produces 538,000 barrels of liquids a day in Angola (crude oil + petroleum gas); 156,000 net barrels per day
ii. More than half of this goes to the US
b. Income from activities
i. $17bil net income
c. Profitability
i. Highly profitable - $204.9bil total revenue 2006

Military Resources (if applicable)
a. No military resources of their own. As with the rest of the oil industry their operations are likely to be protected by govt troops if need arises.
b. In Cabinda, security is assured by keeping the production compound, including short-term homes of international workers, completely segregated from the Cabindese population with high, thick barriers topped with barbed wire. This has been a cause of resentment among some Cabindese.

Provide a short history of the stakeholder group
a. What is their origin?
i. 1958 estab’d operating unit in Angola – Cabinda Gulf Oil Co. (CABGOC) Ltd.
ii. 1968 first offshore discovery – Malongo Field
b. How have they changed?
i. Interests
1. Chevron was the first major international oil company in the country and continued operating there throughout the protracted war period
2. Major discoveries since then include Block 14 finds off Cabinda in the late 90s
3. Natural gas project began in 2001
ii. Level of influence
1. The company has a long-standing history and working relationship with the country, and has been awarded some of the prize concessions, including operating Blocks 14 and 0
2. Sonangol has been fairly shrewd in its ability to carve up block concessions so that no one company can have undue influence in comparison to the others, and in holding large stakes in all the operations themselves.
3. The relationship appears largely symbiotic/non-antagonistic
iii. Resources
1. As one of the largest energy companies in the world, Chevron has incredible monetary and technological resources, experience, and political clout (i.e. Condi Rice used to sit on the Board of Directors)
iv. CSR
1. Chevron is careful to highlight its good corporate citizenship, i.e. nearly 90% Angolan workforce, investment in health projects
2. Sensitive to CSR issues because of bad rep in Nigeria
3. Has formed 2 public-private partnership, one with USAID and one with UNDP
a. Contributed $10mil to USAID for food aid and microcredit
b. $3mil to UNDP for SME development
c. What are their future goals?
i. Continued exploration and production, particularly in their main concessions Blocks 0 and 14 (both off Cabinda)
ii. Complete building of 5 million-metric-ton-per-year LNG (liquefied natural gas) plant started late 2007, expand production in natural gas